Santa Rally May Be Continuing After a Breather

The FBM KLCI revisited the resistance along 1,465, ending on a positive note for the
fifth session coupled with the effective addition of YTL and YTLPOWR into the FBM
KLCI. Meanwhile, the US stock markets were relatively positive on the Triple Witching
event last Friday. Given the (i) more positive retail sales in November, (ii) dovish tone
from the Fed in the most recent FOMC meeting and (iii) anticipation of 3 rate cuts by
2024, we believe there could be more upside potential to the stock markets going
forward. Also, a softer dollar would support and lift the emerging markets higher.
Thus, we opine that the market may be acquiring fundamentally solid companies in
Hong Kong exchange for long term rewards. On the commodity markets, Brent oil
prices extended the rebound for another session above USD76/bbl.

Sector focus: Given the addition of YTL and YTLPOWR into the FBM KLCI, the Utilities
sector may be worth trading in the near term. Meanwhile, we like the Johor theme
with the ongoing developments such as JB-SG RTS as well as the potential revival
of KL-SG HSR. Thus, we believe buying support may be extending within the
Construction, Property, Building Material and Solar-related sectors. Also, we favour
the Technology sector amid the bullish US stock markets environment.

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